A May 2014 working paper by nonresident Brookings Institute fellow Dr. Charles Frank, highlighted in The Economist, claims that wind and solar power are the least, while nuclear power and combined-cycle gas generation are the most, cost-effective ways to displace coal-fired power. (He didn't assess efficiency.) This detailed twelve-page critique by RMI's Amory Lovins shows that those priorities are artifacts of Dr. Frank's obsolete data. Replacing nine of his wrong numbers with up-to-date empirical ones, even without correcting his methodology, reverses his priorities to the ones most energy experts would expect: after efficiency, the best buys are hydropower (on his purely economic assumptions), then windpower, photovoltaics, gas combined-cycle (assuming 1.5% methane leakage and medium price volatility—assuming zero price volatility would put gas ahead of solar), and last of all nuclear power. Dr. Frank argued that the way most investors pick power-sector investments—lowest long-run economic cost—is wrong, or at least incomplete, because different technologies generate power at different times, creating different amounts of value. He's right that value as well as cost should be considered. But interestingly, using correct data, the cost- and value-based calculations yield the same priorities, so adjusting for time of generation doesn't matter. Those priorities would probably be further reinforced (other than big and some small hydropower) if other kinds of hidden costs, risks, and benefits were also considered. The more obvious of Dr. Frank's data problems were assuming wind and solar power half as productive and twice as costly as they actually are, gas power twice as productive as it actually is but with no methane leakage or price volatility (let alone extractive side-effects of fracking), nuclear power at about half its actual cost and construction time and one-fifth its actual operating cost, a supposed need for new generating capacity and for bulk electricity storage, and no efficiency opportunities worth mentioning. His method of analyzing grid reliability was also unique and strange. These assumptions drove his unwarranted but, thanks to the Economist, widely publicized conclusions.
Dr. Frank argued that the way most investors pick power-sector investments—lowest long-run economic cost—is wrong, or at least incomplete, because different technologies generate power at different times, creating different amounts of value. He's right that value as well as cost should be considered. But interestingly, using correct data, the cost- and value-based calculations yield the same priorities, so adjusting for time of generation doesn't matter. Those priorities would probably be further reinforced (other than big and some small hydropower) if other kinds of hidden costs, risks, and benefits were also considered.